Siddarth Pai is the Managing Partner at 3One4 Capital, an early-stage venture capital fund based in Bengaluru. The millennial VC fund has invested in startups like Licious, Darwinbox, Aibono, and Bugworks, among 50 plus startups.
In a conversation with YourStory, Siddarth said the Union Budget 2021 should be a ‘statement of intent’ rather than just ‘announcements’ when it is tabled in the parliament on February 1.
“I believe this year you will see a lot of progress in the disintermediation of agriculture, and public sector banks will receive capital support. There will be increased support for the manufacturing sector and there will be announcements on electric mobility. There will be tax sops for people earning Rs 1 to Rs 7 lakh. You will also see increased support to the SMB sector,” says Siddarth.
Several SMBs are looking at incentives offered under the production-linked incentive (PLI), and most of these incentives will help the automobile industry, electronics manufacturing, and the electric vehicle industry. The scheme outlay was around Rs 2 lakh crore in 2020. The government has identified 10-sectors in manufacturing to benefit under this scheme.
However, everybody’s eyes will be on one sector, and that is agriculture. The recent farm law reforms allow farmers to work directly with the market without any middlemen and they can get into a contract with companies and work with any party wanting to buy produce from them.
Last year, the government introduced new farm laws such as The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, and The Essential Commodities (Amendment) Act. These allows farmers a greater degree of freedom in working with private players and those who carry an APMC licence.
“This year you could also see an emphasis on logistics, cold storage, and warehouses. The government will have to address the value chain of agriculture. They will also focus on MSME support and increased outlay to airports,” says Siddarth.
Education is another sector that will receive a big boost. The liberalisation of the education system will take precedence and there will be announcements around the National Education Policy.
“The Budget will also focus on the delivery of the Coronavirus vaccine. There will be announcements around the need for a health stack and announcements on the Ayushman Bharat,” he says.
The government will also focus on ‘One Nation, One Card’ to help its citizens with benefits, he said.
In the last five Budgets, the Union Government focused on startups that helped the industry. And this year, the government will most likely look at how digital India can take off.